"Publish or Perish" -- New Yorker on the ebook biz

[Worldwalker]

This is the part I find significant:

$5.20 for returns.
$3 for producing and shipping.
$3.90 in royalties.
90 cents of profit.

I have no clue how much of the $3 is which in the "producing and shipping" line. Let's say for the sake of discussion that $2 is the cost of printing it, shipping it from the printing plant to the warehouse, storing it in the warehouse, shipping it to the distributor, shipping returns back from the distributor, etc., leaving $1 for general overhead -- editing, accounting, etc.

So, with that assumption, an ebook costs the publisher $7.20 less to bring to market than a pbook. The publisher's cost is $4.90 for the ebook, compared to $12.10 for the pbook. And that's assuming identical royalties based on the HC cover price. If the publisher were to sell the books for $10, with the same 50/50 split with the online store, and the mentioned 25% royalties, then they'd be paying that $1 for overhead (if that much), and $2.50 in royalties (still more than an author gets from a paperback), and make $1.50 per ebook, rather than 90 cents. They'd be making over half again as much money per book sold, and the lower price of the books would not only increase their sales directly, but also drive an increase in ebook reader sales, which would expand the market for the books and increase their sales indirectly. If, as they fear, every ebook sale made is a HC sale lost, then they win on ebook sales to the tune of 60 cents per.

As the article, and posters here, keep pointing out, but the publishers just don't get: Barnes & Noble is not their customer. Amazon.com is not their customer. Apple is not their customer. Fred's Corner Bookstore is not their customer. I am their customer, and when I read about them thinking they have to train me to accept prices I know are inflated -- they can sell a MM paperback at a profit at $6.99, despite the need to physically print and store and ship and pulp books, but "have to" charge twice that for an electronic file? -- they can very easily lose me as a customer, and they're doing a good job of that.

I am their customer. You are their customer. We all are their customers ... or we were. Hard-right politics or not, Baen is looking pretty good right now. Some of theirs (including some duplicating books I have as pbooks), and a few others from indy publishers, are queued up in my TBR list right now. The "agency" publishers can go take a flying leap.

[HansTWN]

Originally Posted by Duiker

Wow. Reading that article was a real eye opener for me. As I read I started composing my post here but when I got to the end and it said that Apple has only agreed to the agency model for a year I decided not to waste my time on the post. All Steve Jobs is trying to do with the Agency Model is buy time and level the playing field while he makes iBooks in to the next iTunes and sells as many iPads as possible. Next year the Agency Model will be dead, Apple will have a foothold on ebooks and they will start selling for whatever they deem reasonable. I wouldn't be surprised if it was $9.99. In the meantime I'll be buying books from less known authors at prices I deem reasonable.

Apple coming to save us from high prices? Dream on. They are the ones that brought this upon us. And don't forget, while he is selling a lot of iPads, the question is, how many books is he selling.

[Janet54]

Great Article,
It summed me up. There are very few authors who I "must have", really only one that I can think of now and his next book is not due out until next year.
I bought the ipad and am really enjoying it as an ereader with kindle app. However I have yet to find a book in Apple's store that I searched for.

Yesterday I read about a book that sounded really interesting, On Amazon the ebook was the same as the dtb, $13.99. I passed, I will wait for it to come down as I have too many books on my Kindle in the tbr list.

I really did enjoy this article, it was long but worth the read.

[DArenson]

Originally Posted by Worldwalker

This is the part I find significant:
I am their customer. You are their customer. We all are their customers ... or we were. Hard-right politics or not, Baen is looking pretty good right now. Some of theirs (including some duplicating books I have as pbooks), and a few others from indy publishers, are queued up in my TBR list right now. The "agency" publishers can go take a flying leap.

I agree. I'll be buying less ebooks from the big publishers, and more from indies. There's no excuse for overpriced ebooks; it's bad for authors, bad for readers, bad for literature as an art form. The big publishers will soon see more and more readers buying books from their competition -- the indie authors and indie publishers. Right now, these guys aren't serious competitors, but they'll become so if ebook prices inflate.